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tv   Street Signs  CNBC  March 14, 2013 2:00pm-3:00pm EDT

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>> this is an amazing market. the dow up over 10% for the year and up 51 for the day. that will be our tenth day we have been in positive territory.
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>> always a pleasure, simon. >> pleasure. total pleasure. >> that's it for "power lunch". >> "street signs" begins next. see you again tomorrow afternoon. >> get ready, america. we are taking you inside the old street signs time machine. history says with a start to the year like this, we are going to end the year up. but with the fed trillions in debt and a still nervous consumer, is this the year history gets it wrong? is it time for you to get bullish on jc penney? martha loves them. should you?
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>> records continue to fall on wall street and could finish at a record close. it's above 14,500 for a very first time. the s&p 500 tantalizingly close to a record close of 1565. let's get down to all the action on the trading floors. >> the important thing is we're at near triple top to the s&p 500. going back a long way. here is your 12-year chart on the s&p. there is the triple top. they're in 2000 and 2007. the march has not been even. here is your leaders in terms of the sectors at what's really been mattering. the new highs are in the consumer discretionary group. and health care. defensive names for the most
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part except for the consumer discretionary. the important thing, way behind. and i mean way behind. put up the financial sector here. remember twi2008? that's why we're so behind. and remember tech? we have got to go back further. remember the dot com bust? it never really hit. two sectors really lagging. there it is. long, long way back to where we were right here. rick, how's it looking in the bond market? >> i hope we're both alive the next time nasdaq hits 5,000 and i wouldn't bet on it. when it comes to interest rates, everybody saw that drop to
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332,000 on initial claims. the news for traders is not that claims are going down. the news for traders would be if claims jump. they expect this. so it really didn't move the market. but we did see a sloppy 30 year market. weird situations tend to develop. mostly bullish ones. we see all matureties lightly in positive territory. courtn courtney, it's all yours. >> i'll take it for courtney. i'm not going to let you off that easy. i have a question for you. very quickly. you just said at the top that i don't think you guys will be alive. i hope you are. i hope you live a long and fruitful life. but are you negative on equities? >> no. actually i think, you know, if i was allowed to invest, i think technology would be one of the areas. i think apple has good value. however, i just don't see 5,000
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in the cards any time soon. >> fair enough. ri rick, thank you very much. >> all right. let's forget the market highs for a second. we are racing towards another milestone. the dow is up 10% so far just this year. it's on track for its bis first quarter since 1998. that's nice. but what does it mean? that we are likely to have a pretty good year. check this out. only 12 times have we seen gains of more than 8%. and every one of those times we have been higher. 1991. one q is up better than 10%. full year up a whopping 33.5%. all of the heady days of the mid 90s. 96, you can read the numbers yourself. 16-1 for the full year. and all the way back to last year. 8.1% gains for the first
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quarter. we did drop a bit. we still ended on a pretty positive note. every single time we have been up, the dow has ended the year positive. if you go a step further, he did sh show. >> also, peter kenney. peter, i love history, right? but are we doomed to repeat ourself in a good way? or is this year completely making history irrelevant? >> i think this year is really very, very different than what we have seen in the past. primarily because of the fed and quantitative easing. you would have to go back to the 30s to find a similar environment in terms of the break down in markets and gdp that we saw over the past five years. and we have seen a very
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aggressive fed having learned many of the lessons that the fed taught going into into the 30s and applying them. and also providing the sort of confidence and cash flow into the market that consumers industrials, manufacturers all need. and not just in the united states but globally. >> paul, if i heard that every time lebron james scored more than 30, the heat won and he had scored 30 in the first half, and i could bet on the game in the second? that is a powerful stat. will it hold this year? >> i think we will still see gains from here on out. this year is not that much difference. last year at this time the s&p was up 10.4. we're only up 10% this year. we're actually trailing last year. the fed? the fed has never been into markets like it is now. we hear this is not a real bull
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market because the dollar has been debased. the dollar index bottomed in 2008. >> i completely agree with you and i tell you what. i hate those arguments, right? i know all of those things. if i'm mom and pop, my 401(k) keeps going up. >> i think you're right. and you refer to the heady days of the 1990s. people are going to be looking back at this as the heady days. we have seen a strong market here and there is plenty of reasons for it. the first time the s&p hit these levels, stocks were ridiculously valued. bonds were yielding 6%. we have a complete opposite now where bonds are extremely high
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value. and stocks are more reasonably valued. we're at average multiples. the valuation argument isn't as strong but on a relative basis, stocks are still valued. >> i'm not saying the dollar and debt will come home to roost. we will have to pay for all of that. do your clients really care why stocks have gone up? >> not really. i think that the gamble is that we will have initiated enough inertia in the economy so that revenues and the ability for the federal reserve to unwind some of these positions will become something that is digestible by the market. that's the risk. certainly markets are pricing in further improvement as we are seeing from the employment numbers that we got again today. consumer confidence. there are a lots of positive
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threads to the fabric. >> i'm sorry. i have got to jump in on you. i have got breaking news. steve, apparently the treasury secretary is going to pay a visit to our biggest debt holder? >> that's right. thanks. we just learned a few minutes ago that treasury secretary jack lew is going to travel to china and meet with the new chinese economic leader as well as the political leadership over there that was just appointed. it's interesting whether it's a sign on whether the secretary wants to move on some of the issues out there. we have an interview coming up with jack lew. we will be talking to him. whether or not he will move fast on domestic issues becomes very important. he is touring and will be doing
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a meeting in a few minutes and then we will have a sit down interview and we will bring you that interview around 4:15. >> i know you don't want to give away your questions. are you going to hammer him on china? debt? >> i can't -- >> what are you reaching for a water mark? >> i got a whole page full of questions and i don't have that much time. i don't know which ones i will ask. there is the value of the dollar, corporate tax reform. send me a note about what i'm supposed to ask. >> i will. steve and the treasury secretary. all right. you heard martha stewart right here on street signs backing ron johnson's vision for jc penney and now the stock is getting love. and later on, the growing
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backlash against the tsa's decision to allow knives back on planes. this may just be the dumbest thing the government has ever done and you know as well as i do, folks, that's saying a lot. we're back after this.
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>> ron johnson is here. i hope he is certainly here to stay. his vision is strategic and good. just got ahead of itself. it takes a while to change an institution. and i think that it all happened
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a little too quickly is the announcements, the dreams were all expressed a little too quickly. it takes work behind the scenes to make it happen. >> that was part of our interview with martha stewart. it's clear that she firmly believes in jc penney's turn around and she is not alone. saying if ron johnson could pull it off, investors would see a new payday. >> what's the basis of your thesis? >> well, the way i look at it is i look at it from a debt perspective? >> they have quite a bit. the main perspective is whether or not they're going to be able to sustain their capital base in order to execute on their plan.
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in order to raise it without fear. >> you're saying that they will not run out of money effectively. you made the case of why they may stick around. but why should our viewers put money into the stock. >> people are afraid of what's going to happen. the debt holders are going to be able to transfer value and take control of the company. that's the number one fear that guys have about the stock. pretty much any scenario. they will preserve value.
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>> you have looked ron johnson in the old peepers. >> i think if anything he has the confidence in himself. i have to admit that a lot of people very close to ron believe in him, too. as far as we know, the board is still supporting him. the chairman selling off a huge portion of his stake. yesterday the cfo says that his position has not changed. >> i believe you spoke with that cfo. >> i was looking him in the peepers yesterday. and ken made a really -- not really impassioned but a really solid, maybe masterf fuful comm to the whole group of analysts. basically saying yes, the same things that you just heard from will. we could raise long term if we needed to. we probably won't but we could.
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>> if you're thin trouble, a higher credit limit should not be okay. >> it's temporary. e it will probably be decent by back-to-school. i think we will have positive comps in the third and fourth quarter. despite the fact that there is no math, the stock will go up. >> is it going to materially matt matter. >> it will go beyond one-stop strategy. it will be great if it works but they need multiple shots to work to get the kind of traction that they need.
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>> walk through the whole joe fresh collection. did the same thing years ago. product is the same. price point is the same. the stuff looks great. i'm a big fan. >> i guess i'm a boring balance sheet guy because i'm worried about the worst single retail quarter in the history of retail. >> i have agree with that and now new jeans are coming in and everything is fine. >> everything is fine if sales start growing. they don't have a problem with operating cash. their operating cash flow was basically flat. all of that money was spent on new shops.
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that's the problem. it's also the good news. you don't build new shops you're the same old boring fannie. >> did we ever think that jc penney would capture the nation's attention? >> probably the biggest story next to herbalife. >> and just when you thought it was safe to come back to housing. it is t minus five hours until we see the new samsung galaxy s4. >> time now for today's return on retirement. when it comes to retirement security, which country is leading the way? a new report ranks nations on health, finances and quality of life. the surprising results in just a sec. ♪
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19 out of 150 countries ranked. the european countryies. >> after months of decline, foreclosure starts are on the rise. >> when i see housing starts popping up. that's troubling. should we be worried? >> i think we should be worried for the short term. there is big increases that we're talking about here. maryland and nevada, starts are up over 300%. in washington state and new york state, up over 100%.
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i think the good news in all of this is we anticipate this will be more of a short term trend, playing out for the rest of this year rather than a sign that the housing market is tanking again. but certainly in these markets where we are seeing an additional influx, it will have an impact on home prices. it will be a drag. the properties become bank owned properties. >> i thought things were getting better in housing. why are we seeing this resurge? >> these loans have been out there all along. 5 million delinquent loans. we had these delays and mortgage settlements so it felt like foreclosures went away but they're back now. we have to be really careful. we have been basing this entire housing recovery on home price
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apreesh ya appreciati appreciation. lack of supply. because the foreclosures went away. you there are investors to buy them and they will get taken through the system but it's going to have pressure on pricing again. >> that's a great point to do it and water down a housing market, which is finally starting to enjoy some price power. >> yeah. that's a great question. i think it's kind of interesting. i think the artificial shortage has helped the market create a bottom and demand. and i think that home prices probably won't be affected too terribly much in most of these markets because there is such a strong demand. and as these come on, they will
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be -- not everybody wants to buy a foreclosed home. and we have home builders jumping in. and none of the regular home sellers are putting their homes on the market. why is that? there are a lot of buyers who say i don't want these properties. >> that is a good point. many of the properties are very highly distressed and your typical buy ser not going to want to come in and purchase the property and put in the money to fix it up. we do have a lot of investors that we know about. accounting for a bigger part of the market. they will be able to come in and have the cash to fix up the properties into salable condition. we are seeing increases in the number of people flipping homes. i think you have the demand from that investor pool. >> quickly before we go.
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they're going to stretch the paint out for years. rart or than ripping the band-aid off. >> i think it could go up for a couple years. aggressive legislation to prevent foreclosures. the consequence of that is it is prolonging the process. >> good discussion as always. thank you very much. >> get this, folks. more home buyers are in a new york state of mind. more people moved in than out of new york. the bronx is up. the battery is not down. 161,000 new people, all seemingly taking the same subway. new york city now has 8.31
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residents and they are all in those three blocks. next up, the suit and tie discussion. and a vacation on the carnival dream is anything but. does carnival have bad luck or bad maintenance? >> and guess what? it's national pi day. 3.14. in honor of that, there is the 314th best performing stock on the s&p 500. and guess what? it was yum briands. there was a pie joke in there somewhere. we're back after this. ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions...
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>> i'm flying solo today. so let's start with mgm. filing for permission to buy more mgm stock. already owns 18.6% of the company. higher by more than about 7%. stock two, vera bradley. beat the street estimates but it issued guidance below forecast
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for the current quarter and full year. guidance, not good for vera bradley. staying with clothes. stock three, men's warehouse. they reported a fourth quarter loss of 7 cents a share. revenue also below estimates. but you're thinking why is the stock up in the company is saying it is exploring a sale of its struggling k & g suit business. probably some short covering here, too. that stock up more than 20%. stock four, etrade financial. downgrading to an underperform to a market perform. follows the announcement of citadel planning to offer shares. that is the remaining holdings of the company. yesterday was so 24 hours ago. and stock five, ebay. an upgrade for this name. thinks now is the time to buy
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ebay stock. mastercard is issuing higher digital transaction fees. ever core expects that to be manageable for ebay. they say buy ebay stock. it's up nearly 2%. we have breaking news on one of the hottest trading stocks. greenburg greeting us by phone. >> i have been following this story for quite a while. one of the big growth areas is h h -- he says expertise is limited. that it varies widely from hospitals to surgeons. he said aggressive direct to consumer marketing may mislead the public into believing they
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are getting the best choice. this is a very significant development in this very hot stock. >> we're looking at a stock that ten minutes ago was higher than it is right now. it wasn't a direct knock at intuitive surgeical. robotic hiser ekt mys. >> are they the only player in the space? >> yes. >> it was not a direct knock? >> they didn't mention intuitive by name. they mentioned robotic surgeries. i will tell you that last quarter, his ekt -- part of th growth and procedures. i have reached out and they will be getting back to me, they said, they hope with a statement and we will have more on this going forward.
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>> samsung unveiling its new galaxy is4. it's tempting to look at it as a show down with apple but others have more to lose. we always say is this the iphone killer. there is plenty of room for both of these kids to play in the playground. but is there room enough for all five? >> yeah, that's the issue. this is a killer, but who's it going to kill? samsung versus apple is a fun way to set this up. this is apple's home turf. samsung is launching its high end phone trying to gain share. but apple's market share is not the most at risk. samsung had 40% global market
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share. combined they had two-thirds of the market. the others were losing ground like crazy. >> down 55? it is practically lowered. samsung will just run away with this product as well as the massive momentum? >> of course all of those guys have new phones coming out. the blackberry z10. they don't have the marketing muscle of samsung. l it will be easier for samsung to eat into their apple. the android phones are good for
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google but if some sung dominates, that starts hurting profitability more and more. >> fast driver, slow investor. that's what four-time indy car champ told me a couple of years ago right here on cnbc. we're going to ask him if he has changed his investment strategy. and and more bad news for carnival cruise lines. is this just bad luck or bad maintenance. we will talk more about it. >> so >> coming up at the top of the hour. is this the day? top money managers are standing by to explain how you should be investing amid that his tory rally that just won't quick. jack lew is joining us at 4:15
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>> kind of funny how it works out. indy car champion. and charlie kimable, they are in town ahead of the first first race of the series. we're happy to have them here on street signs. i have got to ask you, dario, remember the texas race and you said i'm a fast driver but i'm a slow investor? markets are at an all time high. you're risky on the track. have you gotten more risky with your investments? >> i haven't. i'm still very careful about that. me bernly, i don't see where the rally is coming from. why is it? i don't quite understand that. what i should have done is taken any money that i have to invest
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and bought classic car ts. probably head over to europe and buy om cars. >> when you're on your g5, you're talking about the british pound? >> exactly. >> gee, i wish i had a g5. >> admitting that he's buying the pound. you're an up and coming driver. a special story. i have got to ask you, i'm sure you have got some bank out there. what do you do with your money? >> i have retirement package put away. we can't drive cars for the rest of our lives. got a little bit in the pharmaceutical industry. and just some nice safe bonds. >> safe bonds? here's the thing and your story is very special.
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you have got type i diabetes. you can give yourself. their name is on the car. i assume that's the stock you own. >> the flex pen is one of the tools i used to keep my blood sugars on check. i can't give myself an injection. if i need to, i can get some orange juice. i don't have to stop. that's one of the reasons that i have the support to keep on tracking and trying to win races. guys, i want to ask you, are you guaranteeing victory? >> you never guarantee victory. >> charlie did to me before the show. >> he did? >> no. >> i'm going to put money on charlie. every member of the target team is ready to go fighting for the
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championship it's going to be a tough one again. there was 22 cars in the second. we have got our work cut out. i think i'm surrounded by the right people to try to get the job done. >> i know you guys are skinny and trying to watch your weight. i will buy you a wheat grass shot. >> sounds good. >> indy car kicks off sunday, march 24. i reiterate my call to nbc management that i will carry boxes, lug tires and do whatever's necessary to work down there. coming up, another black eye for carnival cruise lines. is this a case of bad luck or bad management? and we will speak to a former official that says the decision to allow small knives back on
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>> >> all right. the dow industrial is up 57 points. we're watching the s&p 500.
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you heard bill talk about it earlier. the next index that we have got our eyes on, the nasdaq still about 1750 away from its all time highs. still watch the s&p 500. well, the ship -- the carnival dream maybe not turned into a nightmare but not turned into an ideal cruise. the dream currently stuck in port in the caribbean. something happened to the back-up generator causing trouble with the elevators and the toilets. the cruise line is now flying passengers home. passengers will get a refund and half off of a future cruise. this is less than a month after a fire on carnival triumph in mexico. carolyn, you know, maybe it's a run of bad luck but you look at three or four or five of the
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significant cruise line problems and they have carnival's name all over it. >> i think that's the question of the day. certainly there have been three somewhat similar incidences with carnival in the past two and a half years. engine room fire. now we have this, which wasn't a fire but still an engine issue. and you know, when something happens once, it's a one mf off. you get a do-over. happened twice? raise my eyebrows. three types? that's gives you pause. >> my first thought was probably like many of the millions of cruisers and travelers out there. they are known as the more inexpensive cruise line. more available to all. if they're the most inexpensive, do you think there's a chance that they're cutting corners? >> my firsthought is it was a hoax and i hoped it was. carnival does have a lower entry
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price point as weenwegianorwegi. that has absolutely nothing to do with safety and maintenance. i think that carnival has always been a cruise line that's seen as a value market. people want the best value that they can get for their buck. these are not bank presidents the that are going on carnival. these are people who work really hard, maybe only get a couple weeks of vacation a year, and really prize their vacations. so it's important to know that the cost of the cruise has absolutely nothing to do with the ship. >> good to know. carolyn spencer brown, thank you very much. >> you're welcome. all right. from the seas, we head to the skies. and there is growing backlash against the tsa's decision to re-allow knives on planes. and in just a few minutes' time, the tsa's president will be hearing it from all sides on capitol hill. nbc's tom costello following the story for us. >> we're talking about small knives, keep in mind. the blade can be no more than 3.2 inches or so long, very small folding knives. but tsa chief john pistol will
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be before capitol hill in just a few minutes to defend his plan. and you said it, he has got a tsunami of protests coming out against him. his own tsa's officer's union, the screener's union, has come out against this. also, 90,000 flight attendants have come out against it. several pilots organizations have come out against it. the ceos of american, us airways, and delta have come out against it. it is a growing with backlash against the tsa's plan. and he's now in a position to defend it. his argument on this is that the tsa spends entirely too much time looking for these small knives. it's a waste of time and they pose no threat to the cockpit, because now we have a hardened cockpit door. you can't get through the door to get into the cockpit. and they need to instead be focusing on explosives that can, in fact, bring down the plane. the flight attendants argue, listen, we're the ones in t bhe back there. we've gone 11 years without having knives allowed. we already have people who are hot and angry because it's so tight inside these cabins now, because there's not a lot of
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room. we don't need to reintroduce knives into that equation. and the air marshals themselves have come out dpeagainst the ts plan. it's a growing tide of anger and resentment toward this plan and we'll see how long it lasts or whether in fact it will stand. >> tom costello, thanks very much. let's bring in mary schiavo, mary, you were pretty scathing to us in the pre-interview. you think this could be one of the dumbest decisions the government has ever made. how come? >> this is such a ridiculous decision, because what it does is it puts us in the vulnerable position we were on september 11. on september 11, knives under 4 inches were allowed. the screeners didn't even have tools to measure them. and the hijackers were 19 for 19. they took their box cutters, their knives, and their mace, and on three of the four planes, they said they used knives to stab passengers. the only difference between the knives the hijackers used and the once they're going to allow
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is less than about an inch. so literally they're going to hang our security on what this will do. because now tsa agents will have to be pressuring knives. and we know from experience on 9/11, it didn't happen. they simply didn't measure them and allowed them all to go through. >> but, mary, listen, passenger safety is paramount, i get it. but isn't it different now? there are more secured doors on the plane? it's unlikely that anybody's going to get through. the greatest security now is probably to fellow passengers. somebody jumps up on a plane and starts doing something, everybody's going to jump on that person. >> well, what isn't different is the rule about locking and securing the cockpit doors. that was the law on 9/11. people have some revisionist history now. what they have done is strengthen them, but on the only tape of the cockpit voice recording, only one survived on september 11, there wasn't any sound that they crashed through the door. it was that they got it open either through threatening a flight attendant, and they knifed flight attendants on each of the four flights, and passengers. so the door was open. and by the way, there are over 4,000 incidences every year of
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air rage on the plane. so it's not necessarily only a hijacker that will use a knife, but many others. and by the way, in the sequester, they've also cut the ranks of the air marshals. the air marshals took a hit in the sequester. so why are they putting any incidence of danger on a plane? it makes no sense,e, other than what is definitely going to happen is you're going to have longer security lines. and by the way, who has a 2.36-inch ruler? >> that's a great point. i've been in eight cities in the last three weeks working on assignment. what are you going to do? break out over night, say, 2.4 inches, 2.5 inches? the lines are already too long. you know, what's going to happen here? >> well, i assume the first thing they'll have to do is have a government contract to build us a 2.36-inch ruler. i'm reminded of the $800 toilet seats. first of all, they aren't even able to measure them right now. and this is so misguided and so nonsensical, it's almost like they're adding fuel stto the
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sequester fire. they predicted huge lines in security. well, this is one way to get them. >> more good news from the world of air travel. mary schiavo, thank you for joining us. all right, 1565 on the s&p 500. we are less than five points away. that is the all-time closing high. we have little less than an hour left of trading to go. can we hit it? we'll find out. up next, a canceled tv show with a cult following kick-started back to life. we'll tell you who it is and how it was done, coming up. what's next?
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